Harris-Biden admin moves to cancel student loan debt for those with persistent financial burdens
The Harris-Biden administration unveiled its latest attempt at canceling student loan debt Friday, introducing new rules that would wipe the slate clean for millions of borrowers facing “persistent financial burdens.” Approximately 8 million borrowers “experiencing hardship” would be eligible for the program, which would authorize the secretary of education to “waive up to the entire outstanding balance of a student loan” when it is determined that the borrower is unlikely to pay it off.“For far too long, our broken student loan system has made it too hard for borrowers experiencing heartbreaking and financially devastating hardships to access relief, and it’s not right,” Education Secretary Miguel Cardona said in a statement.“The rules proposed by the Biden-Harris Administration today would provide hope to millions of struggling Americans whose challenges may make them eligible for student debt relief,” said Cardona.
The Harris-Biden administration defines the “persistent financial burdens” that would allow an individual to qualify as “unexpected medical bills, high child care costs, significant expenses related to caring for loved ones with chronic illnesses, or devastating economic circumstances from the impacts of a natural disaster.” The Department of Education acknowledges that “many borrowers can and do recover” from these sorts of hardships. Under the proposed rules, the Department of Education will provide two pathways for canceling debt. The first pathway would allow the secretary of education “to grant individualized, automatic relief without an application” to borrowers determined to have an 80% chance of being in default within two years. The second pathway would allow “current and future cohorts of borrowers to receive relief based on a holistic assessment of the borrower’s hardship and would be primarily application-based.” The Department of Education touts that the two pathways will “support stud...